CoinEx announces 3-month shutdown, promises 100% user fund withdrawals

CoinEx has outlined a structured plan to cease operations, citing diminishing market activity, lower trading volumes, waning liquidity, increasing regulatory demands, and rising compliance expenses as key factors behind its closure after nine years in business.

Exchange exit timeline and user assurances

The exchange will initiate its shutdown process on September 15, beginning with gradual reductions in trading and platform services. CoinEx has scheduled futures products to shift to reduce-only mode on September 15. Non-spot services will stop on September 22, and spot trading is set to close on September 29. Users may continue to withdraw their digital assets until December 22.

CoinEx has stated that all customer assets are fully backed and can be withdrawn throughout the exit process. The company maintains an asset reserve ratio above 100%, ensuring clients’ funds remain accessible. To facilitate the withdrawal process, CoinEx will repurchase outstanding CoinEx Token ($CET) balances at a rate of 0.005 $USDT per token, helping users close out their positions.

CoinEx maintains, “User assets are fully backed and can be withdrawn at any time during the shutdown period.”

Following the December 22 cutoff, any unwithdrawn $USDT will be placed under independent custody, where CoinEx will apply a monthly fee equivalent to five percent of the original balance. This move aims to encourage users to withdraw their funds before the final deadline.

Industry responses and leadership perspectives

Changpeng “CZ” Zhao, co-founder of Binance, one of the largest cryptocurrency exchanges globally, commented publicly on CoinEx’s decision. Rather than focusing on the shutdown itself, Zhao drew a comparison to prior exchange collapses in the crypto sector, particularly highlighting the handling of client assets.

Zhao contrasted CoinEx’s approach with earlier incidents, mentioning the case of QuadrigaCX, which became infamous when clients lost access to millions in deposits after its founder’s death. He emphasized that recent closures, including CoinEx, have allowed customers to withdraw their assets in an orderly manner, a stark improvement over past failures.

In Zhao’s words, “At least the few recent wind-downs during this winter have allowed users to withdraw their assets, unlike the QuadrigaCX styles of previous cycles.”

QuadrigaCX’s collapse marked one of the most significant losses for crypto investors, with frozen funds and unresolved claims. CoinEx’s approach seeks to avoid such turmoil by allowing adequate time for users to reclaim their holdings.

The company pointed to unfavorable market conditions and increased regulatory scrutiny as its core reasons for shutting down, underscoring growing difficulties for smaller and mid-sized platforms operating amid tightening international standards.

Zhao’s remarks also introduced a distinction between insolvency and failure of business viability. He argued that an exchange does not need to be insolvent to close; economic conditions and regulatory pressures can render a business model unsustainable even when customer assets are intact.

CoinEx’s gradual exit demonstrates a focus on safeguarding user funds rather than forcing a sudden halt. The three-month withdrawal period aims to give clients control and confidence during the winding down process.

Mini dictionary: QuadrigaCX, a Canadian cryptocurrency exchange, suffered a high-profile collapse in 2019 after its founder died, leaving clients unable to access over $190 million in funds due to missing wallet keys and lack of clear custodianship.